That's very well-said/well-written as an explanation of the problem.
I spend a lot of time with people in the forest business, both commercial foresters and USDA Forest Service employees. Also spend a lot of time with folks committed to natural resource conservation. They all recognize the problem, how serious it is, how much it needs to be solved, how much could be gained by solving, and how politically impossible it is to solve it.
If we want to save the western forests in something like their current state, we need a truly massive federal and state program with huge resources to do so. This could be a new Works Progress Administration type effort, that could put millions of people to work. In doing it, we could find new products, new markets, new ways of living with and in our forests. But it would take the kind of money that is usually only spent on the DOD and elections.
The only thing I'd correct is the notion that the pre-columbian forest consisted largely of climax stage groves of large, widely spaced trees. There was certianly a lot of that, but a healthy forest, one not messed with too badly by man, exists in all stages simultaneously. It' snot that a paticular forest "should be" predominantly Ponderosa rather than Doug Fir. In the intermountain west, different species will often follow each other in different forest stages. Even a healthy forest sees an occasional hard burn, as well as other events that can fundamentally alter that stretch of forest.
But we won't see the kind of effort it will take to remediate 100s of millions of acres of western forestlands. So instead, we'll see massive fires, and in 50-100 years we will have very few forests where the typical tree is more than 50 years old. A few hundred billion dollars a year, is a fair estimate of what it will take to avoid this outcome. I don't see that happening in our political climate.